As we previously reported in our February 16, 2017 blog post, “A Rule Deferred: Department of Labor Delays Implementation of Fiduciary Rule,” the DOL anticipated delaying the effective date of the fiduciary rule by 180 days. However, on March 1, 2017, the DOL proposed to delay the fiduciary rule by 60 days, citing the potentially high costs of further delay.
The fiduciary rule was originally scheduled to become effective April 10, 2017. The new proposal would delay the rule’s applicability until June 9, 2017.
The DOL will accept public comments on the proposal to extend the applicability date for a period of 15 days, through March 17, 2017. Further, the DOL will accept comments for a period of 45 days, through April 17, 2017, on the various questions raised in President Trump’s February 3, 2017 executive memorandum, in which the Trump Administration ordered the DOL “to examine the Fiduciary Duty Rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.”
On March 10, the Department of Labor also published a Field Assistance Bulletin (“FAB”) announcing a temporary enforcement policy relating to the rule. The FAB provides that if the rule is delayed and the delay is issued after April 10th, the Department of Labor will not initiate enforcement actions against advisers during any “gap” period in which the rule becomes applicable before a delay is implemented. In addition, if the Department of Labor does not delay the rule, it will not initiate an enforcement action against an adviser that failed to comply with the rule by the April 10 applicability date, so long as the adviser complies within a reasonable period.
The proposed delay will not become effective until a final rule is issued by the DOL. In the meantime, the recently issued FAB may provide some comfort to advisers on the Department of Labor’s enforcement while the future of the rule is being determined.